Wrong CCL reference may divert payment to another tax bill

Businesses paying Climate Change Levy with the wrong payment reference face a new stated consequence: HMRC's Pay Climate Change Levy guidance now warns that the payment may be delayed or used to pay a different tax bill the business owesGOV. Where the payment has already been applied to the wrong bill, the guidance adds an explicit remedy — contact Climate Change Levy enquiries to ask for the payment to be movedGOV. The previous wording mentioned only a delay in allocating the payment correctlyGOV, so the update both widens the stated risk and gives affected payers a route to fix it.

The reference at issue is the 13-digit payment reference number shown on the levy returnGOV. Getting it right matters because the reference is what links the money to the liability — cheques must carry it written on the back — and an error can now send the funds against another outstanding HMRC debt rather than the levy. Any business that discovers a misreference should therefore check where the money landed before the levy deadline passes, and ask for it to be moved promptly so the levy account does not show a shortfall attracting penalties or interest.

The surrounding payment discipline is unchanged. Levy due must be paid within 30 days of the end of each reporting period, with a single return covering both the main Climate Change Levy and the Carbon Price Support rates. HMRC allows a seven-day delayed-payment concession for those paying by Direct Debit. Where the deadline falls on a weekend or bank holiday, payment must reach HMRC by the end of the previous working day, and late payment can attract a penalty, interest or both.

Four payment routes remain available. Online payment through the bank-account approval route is usually instant but can take up to two hours to appear. Direct Debit requires a posted instruction form and around ten working days to set up, and cannot be used for payments above £20 million. Bank transfers go to sort code 08 32 00, account 11963295 in the name HMRC Climate Change Levy (IBAN GB70 BARC 2005 1770 6293 91, BIC BARCGB22 for overseas accounts), must be in pound sterling, and arrive the same or next working day by CHAPS or Faster Payments or within three working days by Bacs. Cheques payable to 'HM Revenue and Customs only', with the reference on the back, go to HMRC payments Climate Change and Alcohol Duties, HM Revenue and Customs, BX9 1XL. Businesses with nothing to pay must still submit the return.

Legal basis: HMRC guidance Pay Climate Change Levy, which points to the published force-of-law guidance for the levy.